The cost of panic responses in the apparel industry

Vice Admiral Stockdale, a decorated aviator, who spent seven years as a prisoner of war at H?a Lò Prison or infamously called Hanoi Hilton, is the person who has been at the top of my mind for the last couple of months now.

While being interviewed by Jim Collins for his book, Good to Great, Stockdale was asked on who didn’t make out of the camp alive. He quipped, “Oh that’s easy, the optimists”.

He went on explaining it to Collins, "The optimists. Oh, they were the ones who said, 'We're going to be out by Christmas.' And Christmas would come, and Christmas would go. Then they'd say, ‘We’re going to be out by Easter.' And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart."

That is what I feel for the current situation that we as an industry are facing. The Stockdale Paradox.

The apparel world has been a highly unpredictable, dynamic space. Every day presents unseen situations to tackle, be it on the product front or the business front of the industry. However, Covid-19 and its economic repercussions are brand new for us. And while we might find thousands of references to learn from for any other problem, sadly, there is no checklist (yet) for a pandemic.

There is a lot of buzz about a deteriorating economy and downfall of businesses which is creating collective panic across the world. In such a scenario, many apparel brands have given a knee-jerk response by withholding payments, canceling orders and even terminating contracts with their manufacturers and manufacturers, in turn, have become hesitant of investing in tools, reducing manpower and stringent cost-cutting measures which if avoided, could have aided their production and helped them in reducing their recovery periods post Covid-19. This has created a catch-22 situation in the apparel industry supply chain.

While it is understandable that this aggressive response from brands of pulling the monetary support has been an act of self-preservation, behind it is the reality of Stockdale Paradox. That states, having faith in the fact that you will prevail in the end is important, but it must not compromise the discipline to face the harsh realities in the present.

There is no doubt in the fact that we will get over this difficult time. However, this optimism has led brands and manufacturers to make premature decisions in myopic self-preservation. And it is dangerous because companies are unconsciously making decisions that are likely to make it quite difficult for the entire apparel sector to successfully pull through the economic slump of this pandemic.

What to do instead?

There is no split argument about the fact that Covid-19 has and will continue to cause significant disruptions in the apparel sector but, our methods of response in this duration can determine how well and quickly we manage to get back on our feet.

For instance, at one end, where fashion and apparel are not the most essential requirements of consumers currently, but at the other end, opportunities for a technical garment with anti-microbial finishes and self-sanitizing properties are likely to grow tremendously. The ubiquitous face mask has become a necessary functionality of daily apparel.

Furthermore, things like the part of e-commerce, the need for safety and security, changes in the work environment, etc. are emerging as important customer demand. This part of the business has evolved considerably for the brands over the last decade but the manufacturers who have been catering to the large retailers have had their operations geared for them and not for a brand selling online who would want smaller orders fulfilled at a regular interval.

Our world, collectively, has entered a new normal which requires apparel companies involve in rigorous research and development, investment in new technologies, collecting data, and planning for the renewed needs of a post-pandemic populous.

We have indeed been pushed back by a couple of years, but in the current time, our actions can accelerate the gain of all the lost profits. We, as brands and manufacturers, have a shared responsibility to safeguard and rebuild our supply chain.